Nomura released a report stating that it has downgraded the investment rating of VIPS.US from 'buy' to 'neutral', and its target price has been lowered from $21 to $14. The report states that Vipshop needs to make difficult choices between maintaining stable profit margins and revenue growth.

The report states that the intensified competition among e-commerce giants has led to a deterioration of the business environment, and the price competition in the e-commerce industry has never been so fierce. From the time that PDD.US (PDD Holdings) first launched its low-price strategy, it has since been emulated by Alibaba-SW (09988.HK) (BABA.US) and JD-SW (09618.HK) (JD.US). Alibaba, JD, and others provide consumers with discounts, including lowering the threshold for free shipping and making returns easier.

Nomura believes that intensified competition has led to the deterioration of the e-commerce ecosystem. The emphasis on low prices among e-commerce giants is expected to be more harmful to smaller players like Vipshop, and consumers are more likely to be loyal to e-commerce leaders offering discounts. However, the bank believes that the loyalty of Vipshop's super VIP members is still strong, accounting for 16% of quarterly active customers.